Dear Madam,
I was interested to read your feature on offshore jurisdictions and India (Racing for a place in the sun, IBLJ volume 3, issue 4).
While Mauritius entities have hitherto been widely used for inward investment into India (accounting for approximately 44% of overseas investment into India between April 2000 and April 2009, according to a recent study by Deloitte), this has undoubtedly been driven by the favourable Double Taxation Treaty (DTT) which exists between the two countries.
While there have been challenges to the Indo-Mauritius DTT in the past which have resulted in some tightening of the regulations, the perceived holes in the Indian tax system that the DTT offers investors are expected to result in renewed challenges to the DTT, if indeed it is to survive at all. As a result, investors in India are increasingly looking to other less traditional jurisdictions as an alternative to Mauritius to structure their investments, in order to achieve a degree of certainty as to their future tax treatment.
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